Nissan COO upbeat on company outlook, unsure on U.S.

AtsukoFukase

(Adds more COO comments, background.)

TOKYO (MarketWatch) -- Nissan Motor Co. (7201.TO) remains confident that it can soak up any potential weakness in the U.S. market despite a bleak outlook stemming from the stuttering U.S. economy and the weakness of the dollar versus the yen, Chief Operating Officer Toshiyuki Shiga said Monday.

Shiga said it's tricky to interpret the potential fallout on Nissan from recent U.S. stock market turmoil in the wake of jitters about economic growth and subprime lending worries.

However, "it is quite difficult to take an optimistic attitude toward the U.S. market," he told reporters at a news conference.

A Nissan spokesman later said that the company doesn't have any direct exposure to the U.S. subprime loan market.

Part of the reason for Nissan's optimism, Shiga said, is strong sales in fast-growing markets like Brazil, Russia, India and China, which could help take the sting out of any potential problems in the U.S.

Shiga shrugged off an issue that's piled pressure on the shares prices of Japanese exporters like Nissan in recent weeks - the decline in the value of the dollar. He said that Nissan's policy of sourcing supply products locally provides something of a shield against fluctuations in the dollar-yen exchange rate.

Nissan's Chief Executive Carlos Ghosn has taken the same line, arguing at the end of November that he saw no major impact on the company's long-term business plans from the rise in the yen against the dollar.

Nissan, Japan's third largest auto maker by volume, faces slowing demand in its domestic market. But the company is comfortable with its sales and operating profits guidance, Shiga said, citing indirect cost cuts such as early retirement of employees as one of factors that may help its earnings.

"We are in good shape," he said.

For the current fiscal year ending March, the company has a target of global auto sales of 3.76 million vehicles and operating profit of Y800 billion.

With his outlook generally bullish, Shiga said the recent slide in the company's share price is frustrating. Since the start of the year, Nissan shares have about 12% while the Nikkei 225 index has dropped about 9%.

Shiga said all that Nissan can do to try to counter that is properly explain its business strategy to shareholders - and post good earnings.

Shares in a swathe of Japanese auto makers have fallen sharply recently, along with the overall decline in equities prices globally. Nissan's shares ended down 3.1% at Y985 on the Tokyo Stock Exchange on Monday, while the Nikkei dropped 3.9%.

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